I feel that with high cash flow properties, its still overestimating the actual return from the investment, but at least its giving some credit to the earlier cash flows and taking that into consideration.I will plug in a discount rate for NPV that reflects the amount of risk I am taking and make sure I get zero.I will look at the simple rate() of the overall investment by adding up all the cash flows, including the final sale proceeds and using excel's rate() function to get an annual compounded rate of return.

Taxes and insurance range from 2,500 to 3,500 annually on each.

You would need about $260K annual gross income to qualify.

I assume rate is annual, e.g., 7%.

By these figures, the is NOI = 87,978, giving a cap rate of 11.5% buying at the listed price of $760,000.Now, I'm thinking these expenses are way too low, so now I'll plug in the 50% rule.Annual Rent Income = $141,720 Annual Expenses = $70,860NOI = $70,860At the listed purchase price of $760,000, this would be a cap rate of 9.3%.$70,860/12 months = $5905.00 NOI per month$760,000 @ 9% for 30 yrs = $6,115.13 monthly mortage paymentFor a NEGATIVE cash flow of $210.13 per month.So, shooting for $100 cashflow per unit, I would need to purchase at around $435,000.I pulled the 9% interest rate + 30 year term out of the air, so any corrections on the reality of such a mortgage are appreciated.Do my calculations look right?

Of course cash flow is always the first metric I look at, but what about GRM (gross rent multiplier = purchase price/ annual rents)?

The interest rate is usually an annual rate, though, unless someone's trying to be really tricky.

We would need to be right at the bottom, and then have 12% annual appreciation for five years to be back at $335K.

From an annual standpoint that's almost $4800 per year.With regard to multiple family homes, be careful.

There are 2 properties each pricedat $45K, there is a 2fam and a 3famLet me know what you think:[/u]Purchase Price: 45,000Appraised value - $80KLot Size:3,630Living Area: 2,160Taxes 899/yrInsurance 700/yrTotal 1,599/yrIncome: $1,100 x 12mos = $13,200/yrNet Income = $13,200 - $1,599 = $11,601 Annual return: $11,601/45,000 = 25% return[b]·Purchase Price: 45,000·Appraised value - $80K·Lot Size: 4,160 sq. feet·Living area 2,654 sq. feet·Taxes 1,594/yr Insurance 700/yr Total 2,294/yr Income: $1,367 x 12mos = $16,404/yr·Net Income = $16,404 - $2,294 = $14,110·Annual return: $14,110/45,000 = 30% return